Farouk Martins Aresa
If you listen to some so called experts on naira, one would think that once naira is devalued, all problems would be solved. The fact remains that there is no way Nigeria can get more foreign currencies than the amount of oil sold. If you want foreign currency, you must earn it by selling something: oil or non-oil products or borrow. Only fools spend more than what they earn to justify business as usual. Something must give – cut your spending of foreign currency or starve!
They don’t get it, naira is already devalued at Bureau De Change. What Central Bank needs right now, is control payments to foreign banks to minimize Central Bank agents’ round tripping and manufacturers’ abuses. Only Central Bank’s or banks’ drafts; no foreign cash should be floating around creating excess naira at any price. The less frivolous naira chasing dollars the more naira appreciates. No country, not even USA can satisfy Nigerians insatiable craving for foreign cash.
It may strike some of us that high demand for dollars at any price rather than go to the Central Bank to justify their reason at 200 naira, is creating panic in the market. You can be rest assured dollar grabbers are not making N18,000.00 a month. Even if he is making one million, that fool and his naira will soon part. Real problem are the poor that have to buy imported rice, chicken, tomato, bread and avian water if those are the only commodities available in the local markets.
Chaos free loaders want: See our poor groan and curse if they have to buy imported expensive food available at the market; but for how long? It will get to a point when those food and goods will sell beyond the reach of the common man. As we saw in other countries like Venezuela and Cuba, resulting in scarcity. Governments with good intention would try to provide for the poor by rationing. It does not look good or work, not in a country like Nigeria. We all hate rationing.
This is why Capitalists say the “market” should determine the price. If food and goods get too expensive, only those loaded with money, the rich buy leaving none on the table for the poor. Socialist governments think that everyone must have equal opportunity because the rich did not get there fairly by pulling themselves up by the bootstraps. Indeed, the system is rigged to favor the children of the rich whose parents have looted the country dry, putting us in a mess.
Both local and foreign manufacturers are threatening to close for lack of raw materials. There is nowhere else in the world foreign companies establish without negotiating the amount of local content in materials, labor and profit. So when companies like Cadbury depending primarily on cocoa, claim they need raw materials from outside, they drain our foreign reserves. It is also true of automobile assemblers (not makers), beer or sugar drinks and food processing plants.
By the time we get to Zimbabwe dollar, even the middleclass and the wealthy would not be able to afford the price of imported goods and services. It would be left to the filthy rich, which are very few. This is why the people say when it gets to the point when the rich would have eaten all the poor, they would only have themselves to eat. So there is no end in sight to the fall of the naira and at certain point, we would start blaming good and bad governments’ policies.
Fortunately, we have a choice. We either go on importing food, goods and services we cannot afford by demanding more dollars or we can grow our food, manufacture our own goods and render our own services. There is problem; our food, goods and services are not up to standard of those we import. These excuses are not entirely true, since we buy subsubstandard products wrapped in fine exotic papers. We must raise our standard and lower local price to compete.
High standard can only be perfected after many trials, errors and practice. Even in those cases where our standards are higher or better, inferiority complex would not let us appreciate our own products. You must have heard about lace materials that were made in Nigeria, shipped across the border and imported back with foreign labels before they can be admired and sold in the market or Ariaria (Aba) shoes labeled made in Italy, China or USA before Nigerians can buy.
Cheap Chinese import of lower quality materials, killed our textile industry. Slippers, decorative mats, bags, beanbags and carvings made in the North and appreciated worldwide as gift but are not well patronized in Nigeria. It is worse in the Southern part of Nigeria when it comes to food production. Any disruption by man or natural disaster in the North creates scarcity in the South. Even Diaspora appreciates African made products than where there is bigger market at home.
Case in point illustrates the reason we foolishly buy dollars and pounds at any price while local tomato rut. Rich men would go to Shoprite for imported tomato and pay five or ten times the price of local tomato. Recently we had a glut of local tomato; selling for N300.00 per big basket that was normally sold at N5,000.00. Unfortunately no adequate storage or factories that could turn the glut into profit by processing them into tomato paste. See Tomato Glut In Katsina
If that is all our problems, education and information may solve it. But deep-seated inferiority complex is more difficult to cure. African countries are more loyal to the goods and services of the colonial masters. We have been brained washed that, in order to be civilized, we must act and copy their behaviors, their taste and patronize their services. Little did we realize that no matter how much we tried, we could only be glorified copycats, never those we wannabe.
Africans taste for foreign food, goods and services as consumers of ready-mades and producers of nothing has no limit. Since African politicians can get their hands on local currencies easily by looting, they flood BDC without reservation to buy dollars, pounds or franc. The Africans that work and sweat for these currencies hardly spend it the way looters that hardly know the value of money do. So no matter how much currency they print, it is taken and used to enslave them.
After buying all they have, the same currency they print is used to buy their natural resources, their services and their land is used to grow and produce the same food they refuse to eat and grow in the first place. The difference is that when those food are grown on the land they have lost control of; the price, where and who agribusinesses sell them to, is dictated to Africans.
This is why the first or appreciable money an African makes; he spends most of it outside Africa in the countries of his colonial masters. He cannot do without French francs, British pounds and American dollars, none of which is printed in African countries. The easiest way to acquire these foreign currencies is to seek inflated profits, so he can exchange his own currencies at whatever price the BDC dictates. He neither controls nor dictates the “market”; colonial masters do.